McDonald’s To Enter $11 Billion Retail Coffee Market

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Over the years of working for ValueWalk, I’ve never hesitated to chastise fast-food chains that continue to introduce a new way to combat healthful eating. Whether The Wendy’s Co (NASDAQ:WEN)’s Baconator or Taco Bell’s Waffle Taco I can’t be asked. Truth be known, it’s because I drink and smoke too much and, well, that would just be overdoing it a bit. All that said, there are moments that I find some comfort walking into McDonald’s Corporation (NYSE:MCD) with a staggering hangover and a need for a Sausage McMuffin and hash browns.

The most beautiful McDonald’s in the world

Now it needs be said, I live in Antigua, Guatemala and there is probably something nostalgic involved when I head to the Golden Arches with a headache and need for something greasy. It’s also cheaper to order the combo with a cup of coffee then it is to order the items individually. But let me make it clear, I don’t want the coffee despite the fact that Antigua’s McDonalds is surely the most beautiful on earth with its immaculate gardens and views of a volcano and 17th century ruins.

I like coffee, especially when given the aforementioned views, but I’ve never once craved a cup of coffee from McDonald’s Corporation (NYSE:MCD); consequently, I found myself a bit shocked when I read today that McDonald’s is getting ready to enter the retail coffee market. It was almost something I would expect from The Onion.

Beginning in early 2015, McDonald’s will begin offering its McCafe coffee in ground, whole-bean and single-cup forms through the announced partnership.

“We think this will increase the awareness of the McCafé brand beyond its current in-restaurant strength and that will encourage more people to try it. I think it allows us to tap into that very large base of coffee drinkers who now make their coffee at home. This will give us access to them as well,” Greg Watson, senior VP, McDonald’s U.S. Menu Innovation recently told

Americans will pay for coffee

With the average American adult spending over $21.00 a week on coffee in 2013, you can hardly blame McDonald’s for trying.

Kraft has “been a wonderful partner in this process. They bring deep coffee expertise and a great distribution network and manufacturing capabilities,” Watson said. “It’s a strong marriage between the two brands.”

While the announcement came today, McDonald’s has been selling bagged coffee in Canada since late 2012 and has already begun testing in the United States in a few supermarkets.

McCafé will be sold pre-ground in Premium Roast, Breakfast Blend, French Roast, Colombian, Premium Roast Decaf and French Vanilla and Hazelnut plus a French Roast Whole Bean.

Watson doesn’t believe that the introduction of McCafe will hurt restaurant sales and expects the company to sell “lots” beginning next year.

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